Jeff Macke of Yahoo Finance made this astute observation: “We’re going to have to get realistic about retirement age. We came up with the retirement age of 65 when people used to live until they were about 59. That seems to have changed in the ensuing 70 years now we’re all living until we’re 90.”
He believes that we are not going to be able to just sit back at say age 65 and think we can sit there for 25 to 35 years and do nothing. He maintains that we’ve got to work longer and save more. He notes that, according to Fidelity Investments, the average 401k has risen to $91,000. Macke calls that a “…nice start, but unless you plan to live in a shed for 30 years, it’s not going to do it.”
GPIS Offers Federal Employees A Free Retirement Analysis
Our Professional agents here at GPIS have met with 1,000s of federal employees over the years and far too many have much less than $91,000. I remember meeting a postal worker back in 2012 who, at the age of 68 had a mere $37,000 in his TSP. He’d taken a large chunk out to remodel his house. Of course he did a “one time in service withdrawal” because a loan wouldn’t give him as much as he needed. By doing this, he took a big immediate tax hit which cost him thousands of dollars in that same year. I must admit, the results in his remodeled home were beautiful. I just hope he can continue to handle mail for the next 10 to 20 years.
While you may not have made any serious mistakes with your retirement money, you probably have incurred some negative hits to your TSP back following 9/11 and again in ’07-’08. Admittedly your control over these circumstance are limited, but there are options short of dumping everything into the “G” fund.
We often speak with our clients about the income gap; the difference between the current gross of say $4,000 to $6,000 per month down to maybe $1,200 to say $1,700 taxable income per month as a pension. No doubt that gap has to be filled by either savings in the TSP account and Social Security or the standard of living is going to be reduced. Of course, now we are being told that SS is scheduled to go broke by 2030. Oh my, that’s a mere 15 years away! The good news is that many of you have been smart and have much larger accounts. The rest of us need to pick up the pace; Spend Less and Save More!!
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If you are interested in either a FREE personal benefit review or a retirement analysis, GPIS is here to help you. Visit our website to schedule your appointment today!